Really? Bayside Marketplace?

Bayside Marketplace has 88,500 new residential neighbors. If only a fraction of them would visit...

On a bright morning at Bayside Marketplace in downtown Miami, Pamela Weller is wearing a broad smile. She’s not soaking up the sun like other visitors to the sprawling waterfront shopping center. It’s the first day of her workweek, and as Bayside’s general manager, she’s happy to play tour guide around her workplace.

“You’re a Miami person and you haven’t eaten at Bubba Gump?” she exclaims, referring to the seafood chain restaurant located at Bayside’s front entrance at 401 Biscayne Boulevard. “It’s super cute! It revolves around the Forrest Gump movie, and when you sit down, they ask you trivia about the movie, like what three sports Forrest Gump played, and all that stuff.”

A native of Columbus, Ohio, Weller still roots for Buckeyes football yet is passionate about Miami. “I think if you don’t love Miami, you should leave,” she declares, still smiling. “I love the culture here. Whenever I go somewhere else and it’s not as culturally enthusiastic, I can’t wait to get home.”

During Weller’s tenure as GM, which started in 2003, her employers have changed three times. She was hired under the Rouse Company, which built the shopping center, with the city’s assistance, back in 1987.

She started working for GGP (General Growth Properties) when it took over Bayside following the company’s acquisition of Rouse in 2004 for $12.4 billion.

By January 2016, her new boss was Ashkenazy Acquisition Corp., a private real estate investment firm in New York City that paid $196 million for a 49 percent stake in Bayside. As part of the deal, Ashkenazy now calls the shots at Bayside.

Yet through it all, Weller has remained at the helm, regularly surveying a property that encompasses around 140 restaurants, bars, and stores, 1300 parking spaces, and a pavilion with a stage where local musicians play live music and visitors often dance, sometimes while holding a cocktail.

Bayside’s territory also includes an octagon-shaped building dating from sometime in the 1960s that, since September 1993, has served as home for a Hard Rock Café. Bayside also surrounds a 130-slip marina, Miamarina, operated by the City of Miami.

“I walk around every day,” says Weller.

She doesn’t walk it alone. As many as 23 million people visit Bayside every year, she says. The majority of Bayside’s visitors are tourists, mainly people ferried from cruise ships docking nearby at PortMiami. Bayside also gets plenty of crowds from events taking place at Bayfront Park or the American Airlines Arena, especially when the Miami Heat win.

And, Weller says, there’s a regular downtown contingent. During a walkabout, she mentions the growing number of people wandering the waterfront an hour before lunch. She beams: “Not too many shopping centers where you can come at this hour and see this amount of people.”

But this tour isn’t about the crowds. Weller wants to show off the completed portions of an ongoing $27 million renovation of the 31-year-old shopping center, where more than 2000 people earn paychecks.

She points out the new paint jobs, hurricane-resistant polyurethane roofs with LED lighting, towering flags from dozens of countries, computerized kiosk displays, the standardized signs, and brand-new booths -- also known as retail merchandising units -- for small merchants.

Most of these changes have been made at Bayside’s north building, adjacent to the center’s parking garage, and give the structure a more modern look than the circa-1980s style that still dominates Bayside’s south building.

Within the Mercado area, where a large circular “Pier 5” sign looms overhead, Weller draws attention to…open space. Three retail stalls were removed from here, allowing a clear view of the outside world.

“We opened it up to downtown Miami and Biscayne Boulevard,” she says. “It’s pretty exciting.”

That’s just the beginning. By the end of this year, she adds, work will begin on the south building, particularly within its somewhat desolate food court on the second floor, which now contains a handful of eateries and some small shops.

The design of these interior improvements is still being worked out by architect Bernard Zyscovich, Weller says, although they’re exploring a simpler food court concept.

And plans are in the works to expand the center’s parking garage, with an additional 448 parking spaces as well as linear retail along Biscayne Boulevard.

Still, the expansion at Bayside Marketplace pales in comparison to what real estate developer Jeff Berkowitz has proposed adjacent to the shopping center on a 1.9-acre surface parking lot for Miamarina.

Berkowitz, who built the Miami Children’s Museum and charter school on Watson Island, has claimed he’ll construct a $430 million, 1040-foot-tall tower designed by Arquitectonica’s Bernardo Fort-Brescia that will include a bungee jumping platform, a Sky Drop in which passengers plunge 65 floors, moving Sky Orbs that provide 360 degree views of the Miami and Miami Beach skylines, and bars, restaurants, and meeting spaces.

Berkowitz has described it as a “vertical amusement park.” Most people, though, compare it to a hairpin. “I call it the inverted toe-nail clipper,” laughs Miami-Dade County Commissioner Xavier Suarez, a former mayor of the City of Miami and father of current Mayor Francis Suarez.

The property that Bayside and Miamarina now occupy, and that Skyrise may stand on in the future, is owned by the City of Miami. In August 2014, 71 percent of Miami’s voters who bothered to cast ballots in a special referendum supported the construction of Skyrise. That same referendum also amended the Bayside Marketplace lease -- for the fourth time since 1985. Among other things, it extended the lease to November 30, 2060, with options for renewal all the way up to November 30, 2113, a time when many scientists believe that most of coastal Florida will be submerged during high tides.

The amended lease requires that a series of improvements be made at Bayside Marketplace that would range between $27 and $35 million, to be paid for by the leasehold owners. Bayside Marketplace’s operators (at the time it was just GGP) also gave $10 million to the city following the referendum’s passage, as well as a $350,000 check that was transferred to the Liberty City Trust, a quasi-independent group affiliated with the City of Miami that seeks to create economic development in Liberty City.

Bayside’s minimum base rent to the City of Miami also increased from $1 million to $1.5 million per year. Of that rent, 7.4 percent flows to the Miami River/Biscayne Bay Land Acquisition Trust Fund managed by the State of Florida for the purpose of buying waterfront land along the bay or river. It was that fund which provided most of the money needed for the city to purchase the 1.2 acres of riverfront land in the Upper Eastside now called Manatee Bend. (See “Linked Parks for Little River,” February 2017.)

And the lease also stipulated that Bayside’s operators give $350,000 to the Miami Bayside Foundation, a non-profit that provides low-interest loans to small businesses owned by women and minorities in the City of Miami, as well as scholarships for minority business students, in the year following the referendum. Thereafter, the $350,000 amount increases by two percent each year.

There are stipulations for the Skyrise tower, too.

Berkowitz is to build infrastructure improvements for Miamarina, construct a new dockmaster facility for the marina, and pay the city $700,000 once construction on the tower starts -- in order to compensate the city for the loss of revenue during the construction process. And once the tower is built, Skyrise is to give the city $1.05 million per year in rent plus an additional $200,000 annually to be allocated to the Liberty City Trust.

A large chunk of the Skyrise construction budget, around $270 million, is expected to come from foreigners interested in immigrating to the United States. Known as EB-5, this federal visa program grants wealthy individuals and their families green cards if they invest at least $500,000 in a venture that provides at least ten long-term jobs.

Back in February 2015, Jeffrey Berkowitz told The Real Deal that he was recruiting 540 investors through the EB-5 program. The website www.skyrisemiamieb5.com touts the project’s EB-5 credentials. And according to an April 8 article in the Qatar-based Gulf Times, Skyrise representatives presented “Miami’s Eiffel tower” to a delegation of the Qatari Businessmen Association during their visit to Miami last month.

The EB-5 program could be terminated on September 30, however, unless it’s extended by Congress, and it isn’t clear how much money Berkowitz has raised to date.

The demolition of Miamarina’s existing dockmaster station, meanwhile, is at least three months behind schedule. Berkowitz also has yet to begin construction of a superstructure strong enough to support the observation tower’s immense weight.

Neither Berkowitz, nor any representatives at his company returned calls from the BT. Nor did anyone at Legends, an entertainment company that owns the New York Yankees and the Dallas Cowboys, and that will reportedly help Berkowitz build and run the project.

Sheila Black, executive director of the Liberty City Trust, says she’s also been calling Berkowitz’s company to find out when construction for Skyrise will begin. So far, there’s no date.

“They were hoping to break ground in March,” she tells the BT, later adding: “The Skyrise project is important because it allows us to have dollars to invest in small businesses in Liberty City.” Those investments will come in the form of low-interest loans for business owners to perform renovations on their retail spaces, she explains.

Pamela Weller is sure Skyrise is going to happen, noting that Berkowitz has already fixed up parts of Miamarina.

“I think [Skyrise] is a game-changer, not just for the shopping center but for the CBD, the Central Business District,” she says, referring to the downtown area where Bayside is situated.

Bayside Marketplace was intended to be a game-changer, too. Its construction on public parkland was championed by Miami’s mayor at the time, Maurice Ferré, who was sure the project would help revive a part of Miami that had been in a slump since the late 1960s.

Ferré thinks the gambit worked. Bayside, along with publicly supported downtown projects like the Adrienne Arsht Center, the AA Arena, and Museum Park helped spark private development within greater downtown Miami. In the process, Bayside helped reverse the trend of people heading to the suburbs, he argues.

“What’s a downtown for, except for high-density projects, which is exactly what we were looking for,” Ferré says today. “It’s either that or we have urban sprawl. The history of Miami-Dade County is urban sprawl. The counter to that is density.”

During its existence, Bayside has had its ups and downs. Although the shopping center drew 12 million customers its first year, the Rouse Company reportedly lost $1.3 million during that inaugural year, and didn’t turn a profit until 1993. And when GGP was on the verge of bankruptcy in 2009, just four years after it acquired Rouse, the company considered selling its entire interest in the mall. As for the Miami Bayside Foundation, there was a period when it wasn’t handing out loans or scholarships at all.

Still, the density that Ferré desired is here. Greater downtown Miami is home to an astonishing 88,540 people, according to an April 2017 Downtown Development Authority (DDA) report. It’s a place where the average household income is $97,671 a year. And with 36 active residential projects now under construction, it continues to grow.

The question will be whether Bayside Marketplace taps into this new energy. Or will it always be dependent on tourists?

Acentury ago the area where Bayside Marketplace now stands was underwater. “The water came up to where is now the eastern lane of Biscayne Boulevard,” says Paul George, a historian affiliated with the HistoryMiami museum and a

By 1920 the city’s population boomed to 30,000 people and its elected leaders decided to expand the bayfront. After a couple of years of eminent domain litigation with the FEC Railroad, the city bought 65 acres of mostly

“[Pier 5] was designed to be a pier where you could moor a lot of charter fishing boats,” George says. “Keep in mind, one of the most important things in that era was taking advantage of an exotic location.”

Aside from the subtropical weather, Pier 5 took advantage of a popular pastime: sport fishing. George says there were regular fishing tournaments held at Pier 5. But even for tourists who didn’t fish, there was plenty to see and buy. “People went there to buy fresh fish,” he adds. “They’d go there to look at the fish on hooks or behind a glass case, like giant sailfish and marlin. It was an incredibly active place.”

Tour boats also operated out of Pier 5. Many of those tours would “connect with so-called Indian villages,” George says. At these “villages,” tourists would watch Indian men wrestle alligators and watch as Indian women wove colorful clothing. The villagers were usually Miccosukee employed by the tour services. “For someone who lived in New Jersey back in the Twenties or Thirties,” George says, “seeing a ‘live Indian’ was a big deal.”

Mike Simpson’s family began operating the Island Queen tours from Pier 5 in the late 1940s. “We were doing sightseeing tours with some of the neighboring islands and Biscayne Bay,” says Simpson, age 43, who continues to run the Island Queen tours from the Miamarina.

By the late 1960s, Pier 5’s popularity had waned so badly the city closed it, and hired local architect Alfred Browning Parker to develop a new concept. (Besides being renowned for constructing modernist-style homes, Parker designed the Coconut Grove Playhouse.) In 1971, Pier 5 reopened as Miamarina, but it was a failure. “It never took off as a popular destination,” George says.

The reason, he explains, was not necessarily Miam

Simpson remembers his childhood days at Miamarina during the late 1970s and early 1980s. Back then, Hard Rock’s future home housed two restaurants, Reflections on the Bay and Dockside Terrace, both of them popular with locals and boaters. “It was all just one big park, Bayfront Park,” he recalls. And in spite of the downtown area’s reputation, Miamarina was a fairly safe place, at least until sunset. Says Simpson: “There was a saying when I was a kid: Get out of Dodge after five.”arina’s design, although the historian admits he hates the name Parker bestowed on it. Instead, it was because many of Miami’s middle-class residents, especially those living along the Biscayne Corridor, were migrating to the suburbs. Stores, restaurants, and other businesses followed them -- usually toward enclosed, air-conditioned malls. “Downtown had so much competition,” George says. “Not just from the suburbs, but shopping centers.”

After visiting Boston in 1976, Maurice Ferré says he realized what Miami needed for a downtown revival: a waterfront shopping center.

“I went up to Boston at the invitation of my friend Mayor [Kevin] White, who was the mayor there for 17 years,” says Ferré, who was Miami’s mayor from 1973 to 1985. “He was about to inaugurate this Rouse project at Faneuil Hall.” Faneuil Hall, a brick market building built in 1741 and owned by Boston’s redevelopment agency, was renovated and reopened by the Rouse Company. “I was impressed,” he says.

Founded by James Rouse in 1933, the Rouse Company built affordable housing and shopping malls throughout the United States. Rouse was renowned for its “festival marketplaces” like Faneuil Hall, Harborplace in Baltimore, and South Street Seaport in New York City that encouraged social gathering and a mix of small and large businesses.

“I thought it was the kind of project that would seed development in the future,” Ferré recalls, “which, of course, it did.”

But not without debate. Some years later, in 1984, the city worked out a deal with the Rouse Company and its local business partners (including developer Armando Codina, banker Raul Masvidal, and Miami Times publisher Garth Reeves) to build a $93 million retail complex that was then called the Bayside Specialty Center. The city kicked in $16 million to build the parking garage and $4 million “preparing the site,” as a Herald article put it. Those preparations included demolishing the 1942 Municipal Auditorium to make room for the garage and dredging up additional bay bottom for the shopping center’s foundation.

Because the land Bayside occupied was deeded as parkland, state officials demanded that part of the rent the city collected from Bayside flow into a special fund managed by the governor and his cabinet that would be used to obtain additional waterfront parkland. (It wouldn’t be used until April 2011, when the city spent nearly all of the money in the fund, $473,000, to buy Manatee Bend for $590,000.)

The Rouse Company, in turn, agreed to pay a minimum base rent of $325,000 in the first year, or a 35 percent share of Bayside’s net income. By the seventh year, the minimum rent would reach $1 million. Rouse also contributed $1 million toward architect Isamu Noguchi’s redesign of what remained of Bayfront Park.

But most of all, Rouse agreed to recruit minority business owners as tenants, use minority-owned companies and employees as contractors, and create the Miami Bayside Foundation to provide low-interest loans for small businesses. When it opened in 1987, 49 percent of the small businesses were owned by women and minorities, many of them black or Hispanic.

Donna Garvey has worked in various businesses at Bayside Marketplace since its launch. When it first opened, she remembers, the place was extremely busy.

“It was like going to a club,” remembers Garvey, who now works at Comics!, a former comicbook store that now operates as a souvenir shop. “There were so many people here. At lunchtime, it used to be so crowded.”

Xavier Suarez, who was mayor of Miami when Bayside was being built and opened, says the shopping center was “built on time and within budget.” Nevertheless, there were hiccups. Opening day was nearly canceled when Miami officials discovered that their own city didn’t have the proper insurance coverage for the thousands of people watching an aquatic parade from Miamarina, Suarez remembers. The city also spent thousands of dollars evicting Reflections on the Bay and Dockside Terrace for non-payment of rent.

Then there was Miamarina. While Bayside was being built by Rouse, the city invested another $1.5 million giving the marina a facelift, only to discover that the fire lines didn’t work, the pilings were unstable, and the decks were either uneven or fragile. The city had to spend another $5 million fixing the design flaws, made worse by Hurricane Andrew. Work finally came to an end in the fall of 1997.

The Miami Bayside Foundation didn’t work as planned, either, in spite of a 15-member board that included five appointees from Bayside, five appointed from each of Miami’s city commissioners, and five appointed by the other ten members. Except for a $300,000 check to Miami-Dade College for the creation of scholarships, there’s no evidence that the group gave away any other money prior to the year 2010.

“I had to disassemble the whole thing and put the whole thing back together,” declares Bob Powers, an Upper Eastside activist who chaired the Miami Bayside Foundation from 2009 to 2012.

Powers and a new board fired executive director Dwayne Wynn. Because Wynn refused to cooperate with the new board, Powers and other board members had to visit several Miami banks with a lawyer’s letter from Bayside. During their scavenger hunt, board members discovered that $1 million in cash was spread out among several non-interest-earning bank accounts, each holding less than $100,000.

Nathan Kurland, who was appointed to the foundation’s board in 2010, says that the Miami Bayside Foundation’s office address at the time was at a boarded-up garage in Overtown. “You can’t make this stuff up,” he jokes.

Kurland, now the foundation’s chairman, says it’s still not known exactly how much money the non-profit collected or spent in its first 13 years of existence. However, once the $1 million was recovered, the board set about immediately handing out loans of $50,000 each to small businesses owned by women and minorities.

In the seven years since Wynn was replaced by Kathleen Murphy as executive director, 68 loans to small businesses in the City of Miami totaling more than $2.8 million have been made, and 747 scholarships worth $5.8 million were awarded. Instead of relying on money from Bayside, the foundation now holds fundraisers. It also holds small-business workshops.

Bayside Marketplace’s Pamela Weller points out that the foundation has received awards, and indeed, the U.S. Small Business Administration recognized the foundation as Florida’s Community Partner of the Year, according to a March 30 Florida Trend report. “It’s probably one of the best boards in the city,” Weller proclaims.

But what about the board’s performance prior to 2010? “It definitely didn’t fulfill the obligations that the landlord thought were being fulfilled,” she acknowledges. “So, you know, from every valley comes a mountain. We prefer not to look backward but to move forward.”

Prince Logan is looking forward, too. For the past year, Logan has been general manager of Bayside’s Hard Rock Café. And for the past two years, he says, the Hard Rock Café international chain of restaurants, hotels, and casinos -- owned by Florida’s Seminole Tribe since 2006 -- has gone through a leadership overhaul.

For Bayside’s Hard Rock Café, this means capital improvements ranging from modernizing the kitchen to replacing the 65-foot-tall electric guitar that was knocked down by Hurricane Wilma 12 years ago. “We hope to have it back up this summer,” he says.

Logan is also determined to bring more locals to the café by promoting live music acts, bringing in more local craft beers, and televising live Miami Heat games. While happy to receive the thousands of tourists and Heat game attendees that Bayside helps attracts, Logan says he’s studied the books and knows that the restaurant can’t depend solely on them.

“In 2012, when the Heat was at its height with Lebron James, the whole area really benefited, and the Hard Rock did well with sales,” he says. “But it kind of went down after that.”

The situation wasn’t helped by inspectors shutting down the restaurant in November 2016 after noting health code violations, which were quickly corrected. However, Logan is hardly alone in describing Bayside as primarily a tourist destination -- much as Pier 5 was a magnet for tourists nearly five decades ago.

“Bayside is targeted for tourists,” says Jeremy Larkin, president of NAI Miami Commercial Real Estate, adding: “There’s a lot of touristy products, a lot of touristy services and restaurants.”

Weller recognizes that 65 percent of Bayside’s crowds are tourists. “We’re the number-one tourist destination in the city,” she says. Still, she insists, Bayside gets its fair share of people from the new residential towers, as well as from the 212,000 locals who work or visit the downtown area on weekdays. To ensure that flow, Weller says, Bayside has built partnerships with the Adrienne Arsht Center in Omni and the Gusman Center on Flagler Street.

But this isn’t the late 1980s or even the 1990s. Bayside Marketplace has plenty of competition. According to the Miami DDA’s April 2017 retail report, there is already 7.3 million square feet of retail within greater downtown Miami. At least another 725,000 square feet of retail is projected to come online with ongoing mega projects like Miami Worldcenter and MiamiCentral Station.

Jeremy Larkin of NAI Miami Commercial Real Estate says downtown area residents are more likely to visit retail closer to their condo units than hoof it over to Bayside, which is separated from most of the downtown area by eight lanes of Biscayne Boulevard traffic.

Indeed, Bayside Marketplace’s separation from the downtown area may be more than eight lanes wide. Alisha Marks Tischler, spokeswoman for the Miami DDA, declined to speak to the BT about Bayside Marketplace, noting that the agency’s board hasn’t taken any position on the ongoing renovation or the proposed Skyrise tower. “We aren’t really involved with Bayside,” she states via e-mail.

And Tony Alonso, a DDA board member and Flagler Street property owner, told the Miami Herald six years ago that, thanks to Biscayne Boulevard, the crowds visiting Bayside and those visiting Flagler Street typically don’t mix. In other words, the Bayside synergy touted by Maurice Ferré doesn’t really exist. “Bayside lives on its own,” Alonso said, “and so do we.”

But Hard Rock’s Logan is hopeful that Skyrise, which is slated to be built practically next door to his restaurant, will entice people in downtown Miami to cross Biscayne Boulevard. In fact, he’s sure that such an attraction will draw locals from all over South Florida.

And even though Skyrise has yet to break ground, Logan is optimistic that the ongoing renovations will bridge the gap between Miami’s downtown and Bayside Marketplace. “Making this place more attractive will attract more people,” he says. “And that will help us.”

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